Experts have projected that in year 2025, the Nigerian capital market would experience notable developments, basically shaped regulatory changes, technological adoption, and macroeconomic factors.
The Nigerian capital market as a key driver of economic growth, offers a platform for mobilizing capital, facilitating investments, and fostering wealth creation.
In 2024, the market experienced notable developments as the All Share Index of equities listed on the Nigerian Exchange (NGX-ASI) grew by 36.25 percent from 74,773.77 basis points in December 29, 2023 to 101,129 basis points as of December 20, 2024. This growth was driven by robust earnings from blue-chip companies and supportive government policies.
The NGX market capitalization increased from N40.9 trillion in January 2024 to N61.3 trillion by December 20, 2024. This growth was significantly influence by new listings, such as Transcorp Power Plc, which added N1.8 trillion to market value upon listing.
In 2025, analysts expect more foreign investor’s participation now that macroeconomic stability is maintained and currency reforms are anticipated to develop, thus enhancing Foreign Portfolio Investments (FPI).
As the NGX planned introduction of a dedicated SME board on the local bourse, which provides small and medium enterprises with better access to public capital, there should be significant growth potential for businesses and diversification of the market base.
For sophisticated investors, the rollout of planned derivatives such as futures and options would appeal to them, thus creating opportunities for hedging and risk management.
The Securities and Exchange Commission’s (SEC) initiatives under the West African Capital Markets Integration (WACMI) program and opportunities from the African Continental Free Trade Agreement (AfCFTA) would also enhance cross-border investment flows.
With Nigeria’s leadership in green finance which is projected to grow, with more green and sustainability-linked instruments expected to be listed on the NGX Impact Board, would create long-term opportunity for both local and international investors as the global focus on ESG investing.
Giving an outlook for 2025, Olatunde Amolegbe, the CEO of Arthur Stevens Asset Management noted that the NGX is poised for moderate growth in 2025 as the government consolidates on economic reforms evidenced by the EFEMS guidelines. He added that foreign portfolio investment inflows are expected to rise with continued exchange rate stability and improved macroeconomic conditions.
Emerging sectors, such as renewable energy and technology, may see more listings, driven by government policies encouraging diversification. Additionally, ESG-focused investments will likely gain traction with the expansion of the NGX Impact Board for sustainability instruments
He further explained that enhanced digital platforms and increased financial literacy campaigns are expected to grow the retail investor base with the introduction of more retail-friendly instruments, like ETFs and fractional shares, could also contribute to this expansion.
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